Despite the EpiPen scandal and a slumping stock price, Mylan (MYL) rewarded chairman and former CEO Robert Coury with $98 million for 2016.
The pay package was blasted as "extraordinary and egregious" by a group of pension funds that launched a campaign this week to oust Coury and five other Mylan directors.
"Mylan's board reached new lows in corporate stewardship in 2016" when it "rubber-stamped the excessive executive pay," the pension funds wrote in a letter on Tuesday evening.
The campaign, which was first reported by The Wall Street Journal, is being led by the New York City and New York State pension funds and includes the powerful California State Teachers' Retirement System (CalSTERS).
"Mylan's bloated pay packages add insult to the injury investors have suffered as a result of its poor governance," New York State Comptroller Thomas P. DiNapoli said in a statement.
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The pension funds, which together own about $170 million worth of Mylan stock, urged shareholders to take action at the company's June 22 annual meeting by voting out six longstanding directors and rejecting a nonbinding proposal on executive compensation.
Mylan's fat payouts to Coury are raising eyebrows given how big of a black eye the drug company received last summer due to the EpiPen situation.
CEO Heather Bresch was forced to testify before Congress to defend a relentless series of price hikes that raised the list price on a two-pack of EpiPens by 400% over seven years to $609. Mylan even had to launch a generic version of the lifesaving allergy treatment.
In October, Mylan agreed to pay $465 million to settle Department of Justice allegations that it falsely classified EpiPen to overcharge Medicaid. Mylan did not admit to any wrongdoing.
The pension funds noted that Coury's big pay package came despite the "reputational and financial harm" Mylan suffered from the EpiPen scandal. Mylan stock plunged by 29% in 2016.
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Mylan has praised Coury as a "key architect" who helped turn the pharma company into a global leader. Coury stepped down as CEO in 2012 to become executive chairman. He then switched to the role of chairman in June 2016.
Coury's pay for 2016 included a $1.6 million salary, $20 million bonus, $50.8 million in stock awards and $22.7 million in "other compensation" that was mostly linked to his transition to the new role.
Mylan defended the compensation for Coury, saying most of it was earned during his 15-year tenure as a senior executive or directly relates to his retirement as an executive chairman last year.
The drug maker cited its "strong financial performance and shareholder growth" during Coury's career, and noted that its market capitalization increased seven-fold over that span.
But the pension funds argue that Mylan hasn't explained how Coury's new role is different from his old one, nor why he should "now be paid both retirement and chairman compensation."
If anything, the pension funds argue that the $98 million figure listed by Mylan "understates his total pay," noting that Coury received roughly $60 million in additional payments for retirement benefits and other pay.
"We believe the time has come to hold Mylan's Board accountable for its costly record of compensation, risk and compliance failures," the pension funds wrote.
CNNMoney (New York) First published